IMF’s Georgieva: US recovery to cause higher interest rates
Managing Director of the International Monetary Fund Kristalina Georgieva gave a speech on Tuesday ahead of the World Bank Spring Meetings, suggesting that a quicker economic recovery in the United States could result in higher interest rates, tighter financial conditions and significant outflows from emerging and developed countries.
The IMF expects a further acceleration in global economic growth and therefore will raise the projected growth of 5.5% in 2021 and will also revise the forecast for 2022. Georgieva said the expansion was only possible due to the “extraordinary efforts” around battling COVID-19, as without the used measures global contraction would have been three times worse.
Georgieva shared that the multi-speed recovery is led mostly by the US and China. The global economy is on “firmer footing”, but within countries and regions the prospects are “diverging dangerously”. She also supported the upcoming infrastructure bill in the US, saying it would boost productivity.
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